The new financing round welcomed new investors such as Zebu Investment Partners, the U.S. International Development Finance Corporation (DFC), and Koa Labs, as well as past investors Lightrock, German development finance institution DEG, and Perivoli Innovations.
According to Crunchbase, the company has raised US$53 million, but including its Series C, Copia’s total funding since inception in 2013 now stands at US$103 million.
The company said in a statement that it harnesses mobile technologies, a network of local agents, and proprietary Copia Logistics to reach a market that traditional retail and Western e-commerce models cannot.
According to IMF, consumer spending in Africa is projected to reach over US$2 trillion in the next three years and the continent’s middle class is the primary driver of this growth.
Copia, on the other hand, runs a profitable business because of how it approaches the market as it focuses on customers in rural areas that struggle to access the same goods and services in terms of choice, price value and reliability that similar consumers in urban areas or of higher income levels can access.
And though this target market can be hard to locate and individuals may have smaller wallet sizes, their number — which Copia says is about 750 million people across Africa — and collective purchasing power present an opportunity, especially when a company thinks hyperlocal.
The company is building a sustainable business that involves a three-way relationship with customers and 30,000 agents in different communities across Kenya and Uganda.
It is a well-known fact that low-income customers in Africa often distrust e-commerce platforms and most of them would prefer to go to a physical store and get what they want, irrespective of the long distances.
As a strategy, Copia recruits small business owners, who have already established some level of familiarity and trust with customers, and trains them to become agents.
Copia’s value proposition is solid with goods not generally available in proximity to the average consumer, said the CEO.
Goods such as building materials or medicine where customers would typically travel to the nearest city or send a relative to get.
On average, rural Kenyans spend over an hour and US$4 per commute to buy such goods.
But with Copia, for instance, 20 customers within a particular location can make various orders, and the company will deliver them to its agents, whose shops and stores are close to customers in that location and this way, customers can pick up their orders whenever they want.
Copia says it also facilitates deliveries to customers’ homes upon request.
“This helps to create the viability of the model from a cost and unit economics perspective. But it also means that we don’t suffer the same issues many e-commerce companies face where deliveries fail because the receiver is not available at the location. Our agents are always there because they’re running their businesses,” Steel said.
Urban and diaspora-based consumers can also use the service to shop for loved ones in rural areas by purchasing the products through Copia’s website or app and sending them to their families.
The agent network model allows customers to choose how they interact with Copia – online or offline.
The e-commerce company pays agents a commission on every sold product, increasing their income by more than 30%, and of the 30,000 agents of the company, 77% are women, the company said.
It takes Copia between 24 and 48 hours to get products to its customers.
According to Steel, Copia doesn’t charge customers a delivery fee, which is a big differentiator from other e-commerce models because it offsets these delivery costs by streamlining traditional supply chain processes as it gets many goods directly from suppliers and aggregates them.
Copia has roughly 1.4 million unique customers and a CAGR of about 200%, Steel said.
In a statement, Copia said it delivers products to thousands of customers daily and has fulfilled more than 10 million orders to date.
Growth across East Africa
The Kenyan company intends to use the Series C funding to grow its model across East Africa, mainly Kenya, Rwanda and Tanzania and Steele believes Copia can access 80% of its serviceable market over the next couple of years, up from 50% currently.
Copia is eyeing other African markets and, depending on what socioeconomic and political macroeconomic conditions dictate, might expand into Nigeria, Ghana, Cote d’Ivoire, South Africa, Zambia, Mozambique, and Malawi.
“Copia’s e-commerce model is built for the unique requirements of the African market and will save many Africans a lot of time and money. We see it as one of the next big leapfrogging technologies; just like mobile phones leapfrogged landlines and solar power leapfrogged the grid, Copia is leapfrogging retail,” Els Boerhof, the managing partner at Goodwell Investments, said in a statement.